New Hampshire Aquatic Resource Mitigation Fund Final In-Lieu Fee Program Instrument

118 Pages·2012·5.25 MB·English

New Hampshire Aquatic Resource Mitigation Fund
Final In-Lieu Fee Program Instrument
May, 2012
Final Federal In-Lieu Fee Instrument Page 2 of 118

Table of Contents Page

I. Introduction 3

II. Statement of Program Need 3

III. Goals and Objectives 4

IV. Interagency Review Team 4

V. Qualifications of Sponsor 5

VI. NH In-lieu Fee Program Description and Operation 6
A. Establishment and Operation 6
B. Geographic Service Areas 8
C. Determination of Fees and Credits 8
1. Fees 8
2. Credits 10
3. Advance credits 11
4. Credit accounting 12
D. Program Operations and Procedures 13
1. Financial controls and accounting procedures 13
2. Administrative costs 13
3. Provision of legal responsibility 14
4. Disbursal procedures 14
E. Reports and Reporting Protocols 15

VII. Compensation Planning Framework Summary 16
A. Geographic Service Area 19
B. Description of Threats to Aquatic Resources 19
C. Historic Aquatic Resource Loss and Current Conditions 29
D. Statement of Aquatic Resource Goals and Objectives 35
E. Prioritization Strategy for Selecting and Implementing Mitigation Projects 37
F. Stakeholder Involvement 40
G. Long term Management and Financial Arrangements 40

VIII. Default and Closure Provisions 42

IX. Signatures 42

Appendix A Aquatic Resource Mitigation Fund Awards, 2009-2011 43
Appendix B NHFG WAP Documentation on Highest Ranked Wildlife
Habitat by Ecological Condition 45
Appendix C List of Available Watershed Planning Documents 55
Appendix D Site Selection Committee Operating Guidelines 58
Appendix E Site Selection Committee Conflict of Interest Policy 61
Appendix F Yearly Schedule/Award Time Frames 63
Appendix G Aquatic Resources Base Layer Documentation 64
Appendix H Compensation Planning Framework by Service Area 65

List of Tables and Figures 118
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I. INTRODUCTION

This instrument will continue the operation of New Hampshire’s In-Lieu Fee (ILF) program, the Aquatic
Resource Mitigation Fund (ARM Fund) operated by the New Hampshire Department of Environmental
Services Wetlands Bureau (NHDES) pursuant to 33 CFR Parts 325 and 332 known as the federal
“Mitigation Rule.” This agreement supersedes the following agreement governing NHDES operations:

 Memorandum of Understanding (MOU) Between NH Department of Environmental Services and
the US Army Corps of Engineers, New England District which can be found at:
http://des.nh.gov/organization/divisions/water/wetlands/documents/in_liew_fee_agree.pdf

Upon execution of this agreement, the MOU, as referenced above, becomes null and void and any
requirements contained therein are no longer applicable. The signatories to this instrument recognize that
cooperation between and among the US Army Corps of Engineers, New England District (Corps), US
Environmental Protection Agency (USEPA), US Fish and Wildlife Service (USFWS), National Marine
Fisheries Service (NMFS), and NHDES is critical to the continued development of high-quality
mitigation and are committed to continue efforts that have been on-going since adoption of the ARM
Fund program in 2006.

The purpose of this instrument is to establish guidelines, responsibilities and standards for the
establishment, use, operation and maintenance of the ARM Fund in a way that brings the existing
mitigation program into compliance with the Federal Mitigation Rule. NHDES has required
compensatory mitigation since 1990 and adopted specific rules in 2004 detailing mitigation thresholds
and requirements. The New Hampshire Legislature passed a law in 2006 establishing the ARM Fund.
Shortly after program adoption, a Memorandum of Understanding between NHDES and the Corps was
signed which established the procedures and guidelines for coordinating compensatory mitigation
requirements for permits issued by the Corps. The NHDES statute describes the operation of the program
and the mechanism that allows NHDES to receive funds for wetland impacts and disburse deposits in a
fashion to maximize environmental benefits from the pooled funds.

This instrument establishes the NHDES as the qualified ILF program sponsor and administrator for the
ARM Fund program. The NHDES will work with the Corps to ensure that requirements for aquatic
resource compensation are being met and that it is recognized that ultimately NHDES is solely
responsible for providing compensatory mitigation for projects which have paid into the ARM Fund.

II. STATEMENT OF PROGRAM NEED

Compensation for unavoidable wetland impacts has been a part of the NHDES program since the mid
1980s and now serves as a critical program to address impacts under the federal Clean Water Act (CWA),
Sections 401 and 404 which result in the discharge of dredged or filled materials within “waters of the
U.S.” and the federal Rivers and Harbors Act Section 10 for structures or work in or affecting navigable
water in the U.S. as administered by the Corps. Under the Corps General Permit (GP) for New
Hampshire, compensatory mitigation for proposed wetland dredge and fill impacts has been required for
projects having more than 10,000 square feet of wetland impact, and for minor projects when deemed
appropriate by the Corps, to comply with federal standards. In March 2004, the NHDES wetlands
program first adopted a set of mitigation rules establishing the requirements for wetland compensation.
Among other things, the rules specified ratios for wetland creation, restoration, enhancement and
preservation of aquatic resources and adjacent upland buffers relative to the type of wetland lost through
the proposed development. During the 2006 legislative session, the General Court enacted Senate Bill
140, known as Aquatic Resource Compensatory Mitigation. These provisions are codified at RSA 482-
A:28 through RSA 482-A:33 and are found at:
http://www.gencourt.state.nh.us/rsa/html/NHTOC/NHTOC-L-482-A.htm. The law creating the ARM
Fund ILF program became effective on August 18, 2006 and the NHDES adopted implementing rules
effective on June 20, 2007. See Env-Wt 100-900 administrative rules at:
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http://des.nh.gov/organization/commissioner/legal/rules/documents/env-wt100-900.pdf

A regulatory program that includes an ILF program provides for greater protection of ecologically
valuable parcels that are identified through scientific analysis, planning, and incorporation of priorities on
a watershed scale. ILF projects offset impacts by identifying larger, more environmentally valuable
parcels that can result in a suite of functions being restored and/or protected. The NHDES ARM Fund
program recognizes the potential for long-term environmental results from wetland mitigation that
considers watershed goals, assists conservation efforts in recognizing green infrastructure plans of a
municipality or region, and has the ability to target important and vulnerable wetlands in a region.

Participation in the ARM Fund program is optional for wetland permit applicants. Since its adoption in
August, 2006, 57 applicants have used this form of mitigation and these funds have been used for 20
projects that restore, enhance, and preserve aquatic resources and upland buffers. This program has been
very successful for permit applicants and has resulted in many significant wetland preservation and
restoration projects across the state. Appendix A provides a detailed list of projects funded by the ARM
Fund as of December, 2011. By consolidating resources and utilizing scientific expertise, the program
provides applicants an appropriate mitigation option for offsetting unavoidable impacts in a timely
manner.

III. GOALS AND OBJECTIVES

The primary goal of the ARM Fund is to provide sustainable compensatory mitigation for functions of
waters and wetlands of the U.S. that are lost due to authorized impacts. While restoration of wetland
functions are preferred, due to the limited number of sustainable options, often preservation of upland
buffers and enhancement are a large part of the compensatory mitigation program in New Hampshire.

This instrument addresses the procedures and guidelines for coordinating compensatory mitigation
requirements for permits issued by the Corps in the State of New Hampshire under Section 401 and 404
of the Clean Water Act (33 USC 1344) and Section 10 of the Rivers and Harbors Act (33 USC 403) and
the NHDES wetlands program (RSA 482-A). The ARM Fund may be utilized for permit actions
involving (a) Corps General Permits, (b) NHDES permits, (c) Corps and NHDES individual permits, and
(d) other cases as may be agreed upon by the NHDES and the Corps. The ILF program proposed in this
Instrument shall be referred to as the “ARM Fund” for the convenience of the parties, but this Instrument
shall not be deemed to establish or qualify as a trust under state or federal law.

The overall goal of the program is to advance the conservation goals and objectives as described
specifically in Section VII, D.

IV. INTERAGENCY REVIEW TEAM

The Interagency Review Team (IRT) is chaired by the District Engineer (DE) of the Corps. Membership
includes representatives of the USEPA, USFWS, and NMFS. The primary role of the IRT is to evaluate
mitigation plans, assist the DE in the review of monitoring reports, recommend remedial measures,
approve credit releases, and approve modifications to this instrument, including approving additions of
projects proposed for funding by the ARM Fund. The IRT’s role and responsibilities are more fully set
forth in Sections 332.8 of the Federal Mitigation Rule. The IRT will work to reach consensus on its
actions.

The parties to this agreement intend that the members of the IRT will review such documents and
mitigation sites as each considers necessary to provide meaningful input, and provide any
recommendations, concerns, or potential improvements concerning the implementation of the ARM Fund
to the NHDES. Comments on the use of the ARM Fund to provide compensatory mitigation for
individual permits and authorizations will be made during the permit review process for each permit.
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V. QUALIFICATIONS OF SPONSOR

The mission of the NHDES is to help sustain a high quality of life for all citizens by protecting and
restoring the environment and public health in New Hampshire. The protection and wise management of
the state of New Hampshire’s environment are important goals of the Department. The Department’s
responsibilities range from ensuring high levels of water quality for water supplies, ecological balance,
and recreational benefits, to regulating the emissions of air pollutants, to fostering the proper management
of municipal and industrial waste, to managing water resources for future generations.

The first ARM Fund payment was received in January 2007 and, after accounts sufficiently accumulated,
one watershed region was advertised for grant proposals in 2009, six advertised in 2010, and two in 2011.
As of December 31, 2011, 57 projects have utilized the in-lieu fee option. A total of $6,546,027.00 of
funds has accumulated in 11 watersheds with a total of 51 acres of wetlands loss from those 57 projects.

The funds have been used for wetland and stream restoration and enhancement projects including projects
in which protective easements were placed on the properties to ensure their long term protection. Several
projects involved solely the acquisition of the development rights through fee simple purchase or
completion of a conservation easement. For the funded projects, the totals gained are noted in Table 1,
which also shows the associated total of Corps credits achieved. Corps stream credits are unit-less but are
based on linear feet, wetland credits gained are also unit-less but are based on acreage.

TABLE 1. Total Net Gain and Corps Credits from ARM Fund, 2007-2011.

Compensation Type Total Net Gain Corps Credit Gain
Wetland Restoration 1.91 acres 1.40
Tidal enhancement 0.08 acres 0.01
Stream restoration 1,974 lin.feet 987

Stream enhancement 26,322 lin. feet 5,908.26

Wetland Enhancement 83.95 acres 5.28
Preservation 3,445.5 acres 70.00

It should be noted that for the 14 projects awarded $2,079,011 funds in 2010, a total of an additional
$6,573,928.00 was leveraged for the completion of these projects. This collaboration with other funding
sources to achieve restoration, enhancement and protection of high priority sites has made the ARM Fund
an integral funding source for many conservation projects. Although matching funds are not required for
ARM Fund applications, the success of projects is driven by assembling funds for project completion.
Table 2 summarizes state permits issued, acres lost and acres mitigated through permittee-responsible
mitigation and ARM Fund options. In light of the program’s proven success over the past five years of
operation, it is proposed that the program be continued and that NHDES remain as its sponsor.

The summary information on resource gain is quantitative and does not include information about the
quality of the mitigation efforts. ARM Fund projects are difficult to summarize since there is usually a
two year delay between when an applicant gets a permit and when a site is protected or restored. In
addition, more state-authorized projects are still being done through the permittee-responsible option
rather than through payment into the ARM Fund. The latter approach results in the compensation taking
place in the same town as the impacts rather in the larger watershed. A description of each year’s
accomplishments is noted in annual reports. The 2010 report can be found at:
http://des.nh.gov/organization/divisions/water/wetlands/wmp/index.htm
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TABLE 2. Summary of NH Wetland Permits, Acres Lost and Acres Mitigated.

2007 2008 2009 2010
Number of NH 840 600 550 500
Standard Permits
Total Acres Filled 100 61 73 70
Number of 27 (48 38 (22 acres) 20 (42 acres) 21 (35 acres)
Permittee Resp. acres)
Projects
Number of ARM 9 (4 acres) 10 (5 acres) 14 (6 acres) 8 (15 acres)
Fund Projects
Wetland Loss 48 acres, 34 acres, 25 acres, 35% 20 acres,
with No 50% 55% 30%
Mitigation
Preservation 1600 acres 1270 acres 2000 acres by 770 acres by
Done as permittee permittee
Mitigation; responsible/ responsible/
Permittee 1077 acres by 326 acres by
Responsible and ARM Fund ARM Fund
ARM Fund
Restoration and 45 acres 4 acres 4 acres by 10 acres by
Enhancement as permittee permittee
Mitigation; responsible/ responsible/
Permittee 2 acres by 14.1 acres by
Responsible and ARM Fund ARM Fund
ARM Fund

VI. NH IN-LIEU FEE PROGRAM DESCRIPTION AND OPERATION

A. Establishment and Operation

The New Hampshire ARM Fund has been created as one of several compensatory mitigation options
available to applicants for impacts to wetlands and other aquatic resources. This mitigation option is
available for use after avoidance and minimization of impacts to these aquatic resources has been
achieved. State rules and federal regulations recognize that ILF programs may be the environmentally
preferable option over other mitigation forms and establish that an ILF payment may be required as a
condition of a permit approval. When required, the compensatory mitigation project must be
commensurate with the amount and type of impact occurring and replace the lost functions and values at
an equal or greater value.

NHDES has developed a more comprehensive approach to mitigation by using the New Hampshire Fish
and Game (NHFG) Wildlife Action Plan (WAP) and other available plans to create an effective decision-
making framework. The state WAP is a strategic blueprint that can guide wildlife and habitat
conservation on public and private lands and waters. The WAP can be used as a guide for mitigation
because its focus is on habitat and it contains a provision for public involvement and regular updating
with new information. The most comprehensive of the habitat maps in the WAP can serve as a guide to
the areas that should be avoided in infrastructure construction projects and areas that could contribute to
conservation goals. The NH WAP identifies 123 species of greatest conservation needs and provides
species profiles and habitat needs. Appendix B provides detailed information on the analysis developed
for the WAP highest ranked wildlife habitats by ecological condition. The WAP can be found at:
Final Federal In-Lieu Fee Instrument Page 7 of 118

http://www.wildlife.state.nh.us/Wildlife/wildlife_plan.htm. In addition to the WAP, Appendix C cites
other federally recognized, state-based plans used for important conservation information that can be
useful in guiding mitigation decisions.

The NHDES mitigation program involves a strategic process of saving natural habitat by directing
development away from sensitive areas and using ARM Fund payments in a targeted and effective way.
This attempts to accomplish restoration, enhancement and preservation on a watershed or landscape scale
that would not otherwise happen. The use of the WAP in the review criteria provides information that
enables the allocation of ARM fund grants to important restoration and conservation ecosystems that will
be resilient to climate change and to other development pressures. Use of this information can lead to
decisions that provide stronger, long-term protection for whole watersheds and other natural systems for
their multiple benefits.

Administrative Procedures

NHDES staff administers the ARM Fund grant program. A Site Selection Committee (SSC) assists in
guiding the program operations and makes project funding recommendations. Members of the SSC
include representatives from the following agencies and non-governmental organizations:

NH Department of Environmental Services NH Assoc. of Conservation Commissions
NH Fish & Game Department NH Assoc. of Natural Resource Scientists
NH Office of Energy and Planning Society for the Protection of NH Forests
The Nature Conservancy
NH Department of Resource and Economic Development, Natural Heritage Bureau

The SSC determines its own rules and order of business and keeps minutes of its proceedings. Standard
Operating Procedures have been developed to guide the SSC actions (See Appendix D). Committee
members must disclose any interest in a proposed ARM Fund project or any adjacent properties affected
by an ARM Fund project and recuse themselves from voting on those matters if they have a conflict of
interest as defined in the SSC Conflict of Interest Policy (See Appendix E). This provision does not
prevent a department or agency from officially supporting any specific request. SSC meeting minutes are
public records maintained at the NHDES offices, and are open for inspection upon request submitted to
NHDES and/or the Corps. No recommendation of the SSC is valid unless there is a motion supported by
a majority of the members of the Committee.

The SSC uses criteria to evaluate each project so all projects within a service area can be compared with
one another. The criteria include items that address the proximity of the proposed project to impacts
(debits), proximity to other protected resources, ability to replace or protect functions lost by the projects
that generated the funds, overall environmental benefit, proximity to WAP highest quality wildlife
habitat, potential to improve or protect rare or endangered species and habitats, cost-effectiveness and
partnership potential. The quality of the program, however, is dependent on good application submittals.

The SSC also evaluates proposals based on site suitability, likelihood of mitigation project success,
maximizing the environmental benefit of ILF funds expended, relative value of the natural resource
type(s) involved, and, in the case of preservation, the relative threat of degradation of the proposed site.
Other criteria used to evaluate proposals, if the information is available, include whether the project has
the ability to address multiple functions, supports a regional conservation initiative(s), is compatible with
the surrounding landscape, or involves collaboration with multiple sources. These evaluation criteria are
described in more detail below.

The Corps, in coordination with the IRT, reviews all projects proposed to be funded. Projects are
advertised for public comment in a 30-day Public Notice. Proposals recommended for funding are
forwarded to the IRT for final approval. The NH Wetlands Council, established by statute, provides state
oversight of the ARM Fund program by assisting in rule-making and approves the annual report prepared
Final Federal In-Lieu Fee Instrument Page 8 of 118

by the Program Administrator to be provided to the Corps, other federal agencies, and the legislature.
The NH Wetlands Council and the Corps review the recommendations provided by the SSC and IRT.
The Corps and the NH Wetlands Council must issue approval of the projects to be funded. The Governor
and Executive Council must issue final approval for funds to be disbursed and has approved all projects
submitted for funding as of January, 2012.

B. Geographic Service Areas

During the creation of the NHDES ARM Fund program, geographic service areas were selected roughly
according to the US Geological Survey’s Hydrologic Unit Code (HUC) 8-digit watershed scale. The
watershed area map can be found at:
http://des.nh.gov/organization/divisions/water/wetlands/wmp/documents/huc8_map.pdf

At the time of program adoption, many stakeholders were consulted and meetings held to create the
program framework. These discussions included local, state, and federal agencies as well as conservation
organizations, business groups and wetland scientists to develop the program and draft administrative
rules for its operation. The collective group determined that scaling the program at the HUC 8 watershed
level would enable it to address several important criteria: the program would consider a watershed
approach, planning efforts would generally follow HUC 8 watershed areas, and the areas would not be too
small, so funds would be effectively collected in amounts that could be put towards good projects. In
addition, it was the consensus of the group that the areas should not be too large, which could lead to
funded projects too distant from the impact areas that generated the funds.

During the preparation of this Instrument, the HUC 8 watershed areas were reviewed by the SSC and
other stakeholders. It was noted that 8 of the 16 watersheds had accumulated funds enough to warrant a
release of funds through competitive grant processes, 3 had accumulated less than $100,000 and 5 had
received no payments to date. With this in mind, the existing watershed areas were modified by
combining areas that were similar in geographic area, climate, historic and current development practices.
These grouped watersheds are called “service areas”. While the geographic service area for the program
as a whole is the State of New Hampshire, the service areas for permitted impacts will be broken into nine
major river basin areas, organized as modified HUC 8 areas, as shown in Figure 1. As noted above, the
proximity of proposed projects to impact areas is taken into consideration during project review, hereby
minimizing the likelihood that impacts will be compensated for at a great distance. Mitigation will be
performed in the same service area in which the impact occurs unless the Corps, in consultation with the
IRT, has agreed to an alternative. In the event that the NHDES cannot provide the mitigation in the
impacted service area through the granting process and the responsibility for satisfying the permit
conditions has been accepted by the NHDES, then any additional mitigation requirements will be the
responsibility of the NHDES.

C. Determination of Fees and Credits

1. Fees

NHDES will generally determine the amount of an ARM Fund payment required from permittees. The
payment for wetland impacts is calculated by NHDES summing the following items:

1) The cost that would have been incurred if a wetland of the same type were constructed
pursuant to the ratios listed in Table 800-1 in the NHDES administrative rules Env-Wt 100-
900, based on a price of $65,000 per acre set in 2006 of wetland created, adjusted according
to the annual simple rate of interest on judgments established by RSA 336:1,II (See
http://www.nh.gov/treasury/Tinfo/JudgmentRate.htm);
2) The area of wetlands that would need to be constructed, pursuant to the ratios listed in Table
800-1, times the cost of land where the impact is occurring as calculated by the assessed land
values derived from the NH Department of Revenue Administration equalization survey (in
Final Federal In-Lieu Fee Instrument Page 9 of 118

FIGURE 1. NHDES ARM Fund Service Area Boundaries as Revised in 2012.

ftES
NEW HAMPSHIRE
ARM FUND
-=='C
BOUNDARIES
ARM Region
1- Al>droscO!Klin R .....
2 - s..co River
3 - Pemio;/ew3ss.et -WflnipeS<lulo;ee Rivers
4 - Salmoo Falls -PisC3IaQ"" R ... "",
5 - Menim:>ck Rive<
6 - lower Comedrut River
7 - Cootoocool<. Rive<
8- Middle Comedic. ... R",er
9 - Upper Comedrut River
Final Federal In-Lieu Fee Instrument Page 10 of 118

3) which land values are divided by the number of acres in each municipality to yield a per acre
equalized land value); and
4) An administrative cost that is not less than 10% and not to exceed 20% of the sum of (1) and
(2) above.

The payment for stream or watercourse impacts is calculated by summing the following items:

1) The cost that would have been incurred if a stream of the same type were restored pursuant to
the ratios adopted by the department, based on a price of $200 per linear foot of channel
and/or bank impacts to be adjusted according to the annual simple rate of interest on
judgments established by RSA 336:1, II; and
2) An administrative cost that is not less than 10% and not to exceed 20% of (1).

DES maintains an “ARM Fund Fact Sheet” for distribution to the general public, explaining the in-lieu
fee program and specifically outlining the cost structure to participate in the program. This fact sheet can
be found at: http://des.nh.gov/organization/commissioner/pip/factsheets/wet/documents/wb-17.pdf
In addition, the ARM Fund calculator can be accessed on the DES website for applicants to auto-calculate
their payment in order to obtain an understanding of the potential mitigation costs for their project. The
calculation tool for determining a payment amount can be accessed at the NHDES web site at:
www.des.nh.gov.

Occasionally the Corps may deem it appropriate to require additional payment to adequately compensate
for direct and secondary impacts of a project. If this occurs, these additional funds will be accepted in the
ARM Fund for the applicant to achieve a state and federal permit. Additional payment may be required
by the Corps based on the functions and values lost and other environmental issues they find that need to
be compensated for.

2. Credits

Credits from ARM Fund projects will be calculated by the Corps using the New England District
Mitigation Guidance document in effect as of December 31 of the year the grants are approved. The
ratios as of January 1, 2012 are shown in Table 3.

TABLE 3. Recommended Compensatory Mitigation Ratios for Direct Permanent Impacts.

RESOURCE Restoration Creation Enhancement Preservation
TYPE (reestablish- (establishment) (rehabilitation) (protection/
ment) management)
Emergent 2:1 2:1 to 3:1 3:1 to 10:1 15:1
Wetlands (ac)
Scrub-shrub 2:1 2:1 to 3:1 3:1 to 10:1 15:1
Wetlands (ac)
Forested 2:1 to 3:1 3:1 to 4:1 5:1 to 10:1 15:1
Wetlands (ac)
Open Water 1:1 1:1 project specific project specific
(ac)
Submerged 5:1 project specific project specific N/A
Aquatic
Vegetation(ac)
Streams (lf) 2:1 N/A 3:1 to 5:1 10:1 to 15:1
Mudflat (ac) 2:1 to 3:1 2:1 to 3:1 project specific project specific
Upland (ac) >10:1 N/A project specific 15:1